Capitalism, Socialism, and The Possibility of Civilization

“To the economists--who are the trustees, not of civilization, but of the possibility of civilization.”-John Maynard Keynes

I met Deirdre McCloskey when I was a fourth-year graduate student. She presented The Bourgeois Virtues the Friday before my dissertation proposal. As I was prepping for that proposal, I skimmed a draft of Bourgeois Virtues. The first 60 pages made — and continue to make — an enormous impression on me as a scholar, a Christian, and a citizen.

Every time I re-read these pages I am reminded that what Adam Smith called the “obvious and simple system of natural liberty” has far too many intellectual opponents and far too few intellectual champions. This is in spite of all it has produced materially, culturally and spiritually.

May Day is this Sunday. It's a time for somber reflection on what people have done in the name of ideas. McCloskey's ongoing (projected to be six volumes) series on "The Bourgeois Era," the scholarship on which it draws, and the scholarship it inspires, shows not only what capitalism has wrought. It also shows us how the alternatives have failed to deliver. For their vision of a better world, the national socialists of Germany and the communists of the USSR, China, Cambodia, and elsewhere killed tens of millions of people. Communism is not a beautiful ideal that was corrupted by bad people. A few minutes of reflection and serious thought reveal it as a blood-soaked attempt to snuff out the things that make us human. Socialism didn’t fail because it is an ideal of which we aren’t worthy. Socialism failed because it is internally incoherent and structurally unsound.

The last few centuries are a standing testimony to the importance of ideas. McCloskey argues that a change in rhetoric is what made the modern world so rich. Similarly, a change in rhetoric almost undid it all. Socialism represents an intellectual rebellion against economics, and in the twentieth century it almost drowned civilization in blood. One might object that I’m being severe and say that capitalists have had their excesses, too. Indeed they have, largely by trying to destroy free markets and using the state to enrich themselves at the expense of others. At first cut, though, it is worth pointing out that the so-called Robber Barons aren’t the ones who built death camps and gulags.

Socialism, it is alleged, is to bring about “the positive transcendence of private property as self-alienation.” The capitalist mode of production, according to Karl Marx, left us stunted, alienated from one another and from the fruits of our labor, and thoroughly demoralized. Marx and his followers take an enormous leap from criticism of “a universe of whose order they do not approve” to the assumption that the abolition of private property will lead to a new form of social harmony. Their promised utopia never materialized and instead generated a pile of dead bodies which, as Alan Charles Kors points out in this lecture, the apologists for socialism have largely ignored. Perhaps this is because of a romantic attachment to what might have been, but as one of the bloggers at Let A Thousand Nations Bloom pointed out last year, romance does not excuse evil.

This is more than an academic discussion. The human consequences of socialism (and statism more generally) are mind-boggling, and our responsibility to our children and grandchildren is very real. Indeed, I have told students and friends that they should read F.A. Hayek’s The Road to Serfdom–the Reader’s Digest condensed version that can be downloaded here–as if their children’s lives depend on it.

I stand by that, but I write with the benefit of hindsight. I will give the last word to Ludwig von Mises, the great economist who barely escaped the Nazis and who went on to publish Human Action, which is, in my opinion, one of history’s great works of social science. Here are its last few sentences, written in 1949:

The body of economic knowledge is an essential element in the structure of human civilization, it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics, they will stamp out society and the human race.

I'm an Associate Professor of Economics at Samford University in Birmingham, Alabama, a Research Fellow with the Oakland, California-based Independent Institute, a Senior Fellow with the Beacon Center of Tennessee, and a Senior Research Fellow with the Institute for Faith, W...